We always talk about following trends when it comes to penny stocks. It might be a niche like electric vehicles or an entire sector like biotech. On this note, the latter has been one of the hottest corners of the stock market today. In fact, biotech and small-cap stocks were among the top performers of the week so far. Let’s take a few of the benchmark ETFs to show what I’m talking about.
The NASDAQ Biotech ETF (IBB) and Russell 2000 Small-Cap ETF (IWM) reached fresh all-time highs. Meanwhile, the broader S&P 500 (SPY) came up short. What’s more, is that the Biotech ETF closed 9 cents shy of its high. The strength in small-cap biotech stocks may be something to take notice of right now. That’s also true in light of continued momentum stemming from vaccine stocks. With the new, more contagious variant identified in the U.S. this week, there could be a brighter spotlight on sector stocks.
However, as I’ve written about in the past, it isn’t just about virus-related stocks. Momentum is building across the whole of the biotech space. Everything from cancer to pain management and everything in between is a focus. On top of that, the raw trading momentum from retail investors has helped fuel volatility in places that are traditionally riskier. Obviously, biotech is one of these, and we clearly see this trend reflected in Monday’s trading action.
So with both small-cap stocks and biotech outpacing the broader markets, what should you do next? Well, you might want to start with a list of penny stocks to watch. Here are 5 that are listed on major exchanges; no OTC penny stocks here. These “Robinhood penny stocks,” as they’ve become known, have seen a strong burst of momentum recently. Will that continue this week?Biotech Penny Stocks on Robinhood
- Allena Pharmaceuticals Inc. (NASDAQ: ALNA)
- InspireMD Inc. (NYSE: NSPR)
- InVivo Therapeutics Holdings Corp. (NASDAQ: NVIV)
- Spectrum Pharmaceuticals Inc. (NASDAQ: SPPI)
- CASI Pharmaceuticals Inc. (NASDAQ: CASI)
The first biotech penny stock, Allena Pharmaceuticals, has seen a nice move so far this year. While daily trading volume hasn’t been too heavy compared to other penny stocks, ALNA stock has moved up as much as 39%. This week shares made a new 2021 high, and Monday’s after-market session saw the penny stock continue to highs of $1.82.
There weren’t any headlines to pair with this extra bump in the afternoon. However, what we can see is that Allena has been attracting institutional interest lately. How can someone tell this? Headlines are not the only thing to consider when looking for penny stocks for your watch list. Also, take account of filings. Steven Cohen’s Point72 Asset Management, L.P. and Orin Hirschman’s AIGH Capital Management, LLC have each reported 8% stakes in the company over the last 45 days or so.
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The company’s pipeline of metabolic disease treatments focuses on kidney diseases. Right now, the company is pushing its ALLN-346 treatment forward. Late last year, Allena released data from its Phase 1 trial of ALLN-346 to treat hyperuricemia in patients with gout and chronic kidney disease (CKD). The data came back favorable, and the company explained that it looks to begin a Phase 1b trial and Phase 2 proof-of-concept trial in the first half of this year. So, as speculation continues to underpin the latest momentum, there are a few milestones to keep in mind right now.InspireMD Inc.
We talked about InspireMD earlier this year. Similar to Allena, I think speculation has been a bigger catalyst recently than anything else. The company is working to advance its CGuard Carotid Stent System, CARENET-III. This was approved to proceed by the US FDA in helping prevent people from getting strokes.
Why this year could “potentially” be an important one for InspireMD has to do with what was said on the company’s last earnings call. CEO Marvin Slosman said that with InspireMD’s multi-generational product development plan underway for a variety of different areas, the hope is “to have those products to market in a timeframe that’s meaningful, within, 2021 potentially.”
What’s more, is that the company has attracted institutional interest despite a lack of news flow. In an amended 13G, Sabby Management showed a 4.99% stake in the company. Also, during the fourth quarter of 2020, InspireMD attracted a new analyst from Alliance Global Partners. The firm initiated coverage with a Buy rating and issued a $0.70.InVivo Therapeutics Holdings Corp.
Sticking with the institutional interest-trend that these Robinhood penny stocks have seen, InVivo showed an amended 13G filed late last week. It showed Jeff Easton’s Lind Partners reporting a 9.9% stake in the biotech stock. Bigger Capital Fund, L1 Capital, and Sabby Management have also filed 13G’s over the last few months.
It’s worth mentioning that InVivo was one of the companies discussed over the weekend in our article, “Hot Penny Stocks To Watch Before Monday’s Opening Bell.” Monday, we saw NVIV stock ended up gapping up and running to highs not seen since last July. We highlighted that InVivo had been more vocal on social media versus using press releases to communicate new developments.
In its most recent tweet, the company focused on a recent interview with Nobel Prize Recipient Sir Richard Roberts, Ph.D., F.R.S. on spinal cord injury. Roberts is also a member of InVivo’s scientific advisory board, the board of directors, and chief scientific officer of New England BioLabs. So with institutional interest & strong leadership, traders seem to have begun taking notice.Spectrum Pharmaceuticals Inc.
A fresh 13G filing on Monday keeps the institutional interest-trend alive in this article. Spectrum Pharmaceuticals’ filings showed BlackRock, Inc. reporting a 19.1% stake in the company on Monday afternoon.
The company has been on the comeback trail after reporting unsuccessful data late last year. Cohort 3 failed to meet the primary endpoint in a pivotal Phase 2 trial for its poziotinib treatment in non-small cell lung cancer. On the bright side, the FDA agreed to an NDA based on data from Cohort 2 of the trial. That evaluated previously treated patients with NSCLC HER2 exon 20 insertion mutations.
Fast-forward a few weeks, and now Spectrum stock is back in motion. The company is also on the presentation circuit. The first 3 weeks of January saw the company present its business strategy and program overview at the BioConnect, ICR, and Oncology Investor Conferences. This week could be another important one for the company as it presents at the IASLC 2020 World Conference on Lung Cancer this coming Saturday. Its oral presentation will be on updated efficacy, safety, and dosing management of poziotinib from Cohorts 1 and 2 of the ZENITH20 clinical trial. So this could be a relatively important presentation to keep in mind.CASI Pharmaceuticals Inc.
Finally, CASI Pharmaceuticals is another penny stock on Robinhood to watch amid this latest biotech surge. The company specializes in hematology-oncology therapeutics as well as other areas of unmet medical needs. Shares of CASI stock have also been on the rise for the last few months. Since the start of Q4 2020, the price has moved up from around $1.50 to highs of $3.60. Following a bit of consolidation on a low-volume pull-back last week, CASI has begun to climb again this week. What’s more, shares surged during Monday’s after-market session to highs of $4.01. This is its highest high since the beginning of 2019.
Last week the company announced that its partner BioInvent International AB would host a Key Opinion Leader call on BI-1206 for relapsed or refractory Non-Hodgkin’s Lymphoma this Thursday. BioInvent is novel and first-in-class immune-modulatory antibodies for cancer immunotherapy. BioInvent’s management team will also provide an update on the ongoing Phase I/IIa trial of BI-1206 in combination with rituximab. CASI Pharmaceuticals Chairman and CEO, Dr. Wei-Wu He, will update the development plan and potential for BI-1206 in China.
Though there aren’t any recent institutional reports on the company, there are analysts following the company. The most recent was Oppenheimer during Q4 last year. The firm has a Buy on the stock and a $5 price target. Given the upcoming presentation this week, will there still be hope for the current trend to continue?Should You Ride The Biotech Penny Stocks Wave?
A lot of trading biotech penny stocks comes down to how you handle volatility. Much like penny stocks, in general, biotech has a lot of speculative similarities. Furthermore, due to the nature of how companies report updates, as we’ve seen with some, one wrong move or bad update can erase months of gains. So if you’re looking for biotech stocks on Robinhood for your watch list, make sure to keep the risks in mind just as much as the rewards.